Biofuels 'not the culprit'

2008-06-03 14:03

Washington - As world leaders search for solutions to the deepening global food crisis, biofuel producers sought to deflect mounting criticism on Monday, assuring critics that crop-based fuels were not the root of the soaring food prices that are thrusting millions into hunger.

Leaders of the US, Canadian and European industries appealed to Jacques Diouf, who heads the United Nations' Food and Agriculture Organisation, and other world leaders to avoid any hasty condemnations or actions that would endanger the world's embrace of the alternative fuels.

"It would be highly precipitous ... for the United Nations or other international bodies to single out biofuels as the major cause for escalating food prices and take actions that might lead to even higher food prices," industry leaders said in a letter to Diouf and the world leaders he will host at a high-profile meeting this week in Rome.

The letter comes on the eve of the FAO meeting, which onlookers hope will help reverse the astonishing surge in crop and food prices that has increased malnutrition among millions of poor people and deepened political instability worldwide.

Many have pointed to biofuels, along with growing demand in developing countries, poor harvests and record-high oil prices, as a central contributor to the commodity revolution.

Yet the letter, sent by Bob Dineen of the US Renewable Fuels Association, Gordon Quaiattini of the Canadian Renewable Fuels Association, and Rob Vierhout of the European Bioethanol Fuel Association, criticised conclusions in a recent report from the FAO and the Organization of Economic Co-operation and Development. The report said rising biofuel production would further fan already combustible food prices in coming years.

The report asked leaders to rethink biofuel policy and called its economic, environmental and energy benefits "at best modest and sometimes even negative".

Sticking up for the alternative fuel

The Bush administration, which has helped foster a rapid surge in production of corn-based ethanol, believes biofuels in the United States account for only two percent to three percent of the price surge.

Other critics say biofuels have played a much larger role, accounting for up to 30% of the increase globally.

US officials, sticking by their numbers, nonetheless stress that they would like to shift biofuel production to crops not linked to food, such as switchgrass.

Brazil, which uses sugarcane to produce its biofuel, is also likely to stick up for the alternative fuel at the Rome summit, which opens on Tuesday.

Biofuel producers are at pains as well to illustrate the economic and social costs of relying exclusively on imported oil for energy supplies, especially in an era of soaring crude oil prices.

"A highly constrained supply of crude oil and petroleum products is wreaking havoc on all countries and markets across the globe, especially with respect to food," the letter said.

To help ease prices and allay concerns about supplies, the biofuel industries instead called for "sound international agricultural policies that allow farmers, especially in food- importing countries, to meet the food demands of their fellow citizens".

- Reuters